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Income Shifting !

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    Income Shifting !

    What is the latest with the proposed legislation ?

    Should I be looking to transfer the Mrs shares back into my name come April or wrap up the Ltd and start again with me as 100% share holder ?

    #2
    Who knows. The law will be passed in April - probably. It might even be possible to apply it without every single case being challenged on the grounds that the rules are not clear. Someone may launch a national campaign to get it stopped.

    Accountants' advice is to do as you suggest, specially since it if is passed, it can be charged on money already in the company. I doubt anyone has a definitive answer though.

    By the way, it's not Income Splitting. It's a "Family Business Tax". Take note...
    Blog? What blog...?

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      #3
      Will the new idiocy - sorry, I meant to say legislation - apply only to companies formed after it comes in to effect or will it apply to all companies regardless of their date of incorporation?

      I'm assuming they havn't been so daft as to specify that it has to be husband/wife relationship to be caught but instead made it sufficiently nebulous that other partners or non-spouces get caught by it.
      Last edited by DaveB; 22 January 2008, 14:00.
      "Being nice costs nothing and sometimes gets you extra bacon" - Pondlife.

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        #4
        not only does it apply to established companies, as mav has already pointed out it will apply to already accumulated funds.

        and no, it doesn't just apply to Husband and wife

        tim

        Comment


          #5
          Originally posted by malvolio View Post
          By the way, it's not Income Splitting. It's a "Family Business Tax". Take note...
          Ok

          So the current thinking is I should clear out my company coffers and utilise the non working Mrs tax allowance for 2007/2008 even if it pushes me personally into the higher rate band. I was quite proud of myself last year that a quick fag packet calc for my final dividend left me within about 200 quid of the higher band when I just did my self assessment. Trouble is it now means I've got a big wad in the company.

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            #6
            That's what the accountants are saying, and as a risk mitigation strategy it seems quite sensible.

            Hang on though - if everyone clears the company bank account with a bit end-of-tax-year divvy, and pays a big lump of HRT as a result, then Gordon's Darling cancels the idea. Big tax lump sum payment acros the country, "ha ha, fooled you!" from Gay Gordon...

            Plan for it but leave it as late as possible might be a good idea.
            Blog? What blog...?

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              #7
              if you have a big wad in the company , close the company via capital distribution this year and start afresh next year with a new co

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                #8
                Originally posted by sidknows View Post
                if you have a big wad in the company , close the company via capital distribution this year and start afresh next year with a new co
                This probably doesn't work in the majority of cases. If you rely on ESC C16, this states that you are ceasing to trade, as opposed to continuing the trade via another company.

                Having said that, I should imagine many will try their luck.

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                  #9
                  Isn't this C16 discretionary (sp?) and can be refused if they decide it's being done for tax avoidance reasons?

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                    #10
                    Originally posted by malvolio View Post
                    That's what the accountants are saying, and as a risk mitigation strategy it seems quite sensible.

                    Hang on though - if everyone clears the company bank account with a bit end-of-tax-year divvy, and pays a big lump of HRT as a result, then Gordon's Darling cancels the idea. Big tax lump sum payment acros the country, "ha ha, fooled you!" from Gay Gordon...

                    Plan for it but leave it as late as possible might be a good idea.
                    You can back-date dividend declarations a week or two without problem.

                    Comment

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